S&P rates Goodyear loan B+

Standard & Poor's assigned a B+ secured debt rating and a 2 recovery rating to The Goodyear Tire & Rubber Co.'s proposed $500 million senior secured funded credit facility and affirmed the B+ corporate credit rating on Goodyear.

The outlook is stable.

S&P said the ratings on Goodyear reflect the company's very weak financial profile, characterized by weak cash flow generation, poor earnings, onerous debt maturities and heavy underfunded employee benefit liabilities. These factors more than offset the company's business strengths, including its position as one of the three largest global tire manufacturers, with good geographic diversity, strong distribution and a well-recognized brand name.

Goodyear's consolidated credit statistics remain weak for the rating, according to S&P, with total debt to EBITDA at about 6x and funds from operations to debt at less than 10%, but S&P said the statistics should improve gradually in coming years.

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